U.S. Secretary of State George Shultz arrived in Israel on Sunday, apparently encouraged that the Middle East peace initiative he began last winter is still showing vital signs.

Shultz arrived from Amman, where he met Saturday with King Hussein of Jordan. It is his fifth visit to the Middle East since he embarked on his peace mission late in February.

This time he comes almost directly from Moscow, where the Middle East was on the agenda at the summit meeting between President Reagan and Soviet leader Mikhail Gorbachev.

According to Israel Radio, Shultz told Premier Yitzhak Shamir and Foreign Minister Shimon Peres at separate meetings Sunday that he had detected a discernible shift in the Soviet stance on the Middle East.

He said he also noticed a change with respect to human rights. The issue can now be freely discussed with Soviet policymakers, Shultz said, adding that he hoped this would translate into more exit visas for Jewish refuseniks.

His assessment reportedly drew different reactions from Israel’s top leaders. Sources close to Shamir said he viewed the ostensible Soviet shift on the Middle East as mainly semantic.

Peres, on the other hand attached significance to the changes described by Shultz, Foreign Ministry sources said.

With respect to Jordan, Shultz reportedly assured the Israelis that rumors Hussein was trying to disengage from the peace process and the fate of the West Bank were wholly without foundation. He said the Jordanian ruler conveyed an entirely different impression during their talk in Amman, Israel Radio reported.

‘A DEAD-END STREET’

Shultz arrived here with blunt words for the Israelis, the Palestinians and the Arab states. The continued occupation of the West Bank and Gaza Strip and the frustration of Palestinian rights is a “dead-end street,” he declared.

“The belief that this can continue is an illusion,” he told his Israeli hosts. At the same time, he warned the Palestinians that the belief that violence can end the Israeli occupation is also an illusion.

From the Arab states he demanded “realism, not rhetoric.” Shultz seemed to agree with Shamir that the Palestinian uprising is on the wane.

Shultz and Shamir emerged from a working session late Sunday afternoon, apparently in a good mood. The U.S. official characterized their talks as “constructive, worthwhile and frank.”

Shamir said he was “grateful to the secretary for sharing with us his comments, interpretations and views.”

Shultz also had meetings with Defense Minister Yitzhak Rabin and with six ranking members of the Knesset Foreign Affairs and Defense Committee. He was to dine at Shamir’s residence Sunday night, and then return to Cairo, which has been his base for his current Middle East trip.

Shamir was to leave at midnight for the United States, where he will participate Tuesday in a United Nations session on disarmament and raise funds for the Likud party’s election campaign war chest.

The Israeli premier was scheduled to address the Conference of Presidents of Major American Jewish Organizations on Monday afternoon and the 75th annual meeting of the Anti-Defamation League of B’nai B’rith on Thursday night.